Who Owns Vermont?

Who Owns Vermont?

By: Clean Yield Staff

Share this post

January 6th, 2015

In the third season of the hit prime time soap opera Scandal, Vermont makes a cameo appearance as an idyllic getaway for a heroic Washington fixer and her boyfriend, a beleaguered U.S. president. As a reward for their many sacrifices on behalf of the republic, they vow to retire in the Green Mountain State, where they will live in a log cabin (presumably large enough to accommodate a full Secret Service detail) and she will make jam. We find it easy to understand why even a fictional Republic president idealizes Vermont. But in the real world of encroaching climate change and rising income inequality, Vermonters know that the state’s assets and many charms must be carefully protected and nurtured. Is Vermont really in charge of its future? And if not, what would it take to get us there?

On two back-to-back unseasonably warm days this October, Clean Yield Asset Management and the Donella Meadows Institute (DMI) hosted two New Economy Week events exploring the central importance of ownership in the new economy — ownership both at the enterprise and geographical levels. Working with the DMI was a natural fit, and not simply due to its convenient proximity two buildings down from us in Norwich. DMI was founded to promote sustainability through research and organizing initiatives inspired by the writings of pioneering systems thinker Donella Meadows. Its website explains, “We have chosen to focus on the New Economy and regional resilience movements as the ideal points of engagement for applying systems thinking. Our Sustainable Economies Program is focusing on Vermont as a model as we build networks to help achieve collective impact in the area.”

About 50 attendees gathered at the Capitol Plaza Hotel in Montpelier on October 15 for a panel presentation and discussion entitled “Who Owns Vermont? Emerging Ownership Designs in Vermont’s Economy.” The panel explored alternative ownership in land, energy, industry, and banking. Panelists included Gwendolyn Hallsmith of the Public Banking Institute, Paul Millman of Chroma Technology Corp., Rich Carpenter of the Acorn Renewable Energy Co-op, and Kathy Ruhf of Land for Good. The session was moderated and keynoted by New Economy systems thinker Marjorie Kelly, a project director at The Democracy Collaborative.

Kelly, author of Owning Our Future: The Emerging Ownership Revolution, opened by observing that “there are very few places that understand re-localizing the economy the way Vermont does,” calling it an “epicenter of the New Economy.”

In her career as a business journalist, Kelly said, she had come to see how important ownership is to the preservation of a firm’s social mission. She pointed to a handful of companies that “behave differently” than most by consciously designing their ownership structures to focus on their employees’ and communities’ needs. For example, in the midst of some uncomfortable growing pains, the employee-owned and -governed South Mountain Company of Martha’s Vineyard, Massachusetts, actually held a vote on whether to grow the company or not — a referendum unimaginable at a publicly held company. The employees decided to keep the company the same size.

Kelly described what she sees as two broad kinds of ownership: extractive, which seeks maximum profits, and generative, which is life serving. Generative ownership models are profit making but not profit maximizing, and they come in different forms. “There’s no monoculture. All have in common a living purpose at their core,” Kelly said. She noted that Vermont is rich in organizations to support this “ecosystem” of businesses, such as the Vermont Community Foundation, the Vermont Employee Ownership Center, and the Vermont Benefit Corporation statute. “Who owns Vermont? It’s a brilliant question. We’re not going to survive 100 years from now if we don’t transition into more generative ownership models.” But, she added, “we’re now creating the seeds of a sustainable future, and those seeds are sometimes farther along than we realize.”

Turning to the question of who owns and controls our banking system, Gwen Hallsmith, executive director of the Public Banking Institute, explained that the U.S. Constitution granted Congress the right to coin money, and that this is one of the most powerful forces in our economy. Hallsmith jokingly recalled Amschel Rothschild’s famous remark, “Give me control of a nations money supply, and I care not who makes its laws.”

However, the Federal Reserve Act essentially passed off that right to private banks, whose powerful lobby now controls the monetary system. When private banks lend money, there is an expectation that all money will earn returns, and this expectation is a primary factor driving growth and environmental degradation. “Public banking works in direct contrast to that,” Hallsmith said, “by acting as a braking system on the growth imperative.” Through public banking, we can break that growth imperative and create a revenue stream for cities and states. Over the past 10 years, public banking has generated over $300 million for North Dakota, a state with a population no larger than Vermont’s. That, Hallsmith said, would be enough to clean up Lake Champlain or fund a single-payer healthcare system.

Turning to industry, Paul Millman, co-founder and president of Chroma Technology, explained that establishing an employee ownership infrastructure was no easy matter for his company. When the optical filters company got started in 1991, it had what Millman described as a huge fight over ownership. Three of the six co-founders could afford to put up equity, but that would have meant that the others would work for them, a concept he found repugnant. (“I come from a socialist family, and employee ownership was in the genes. People who do the work should benefit from it.”) The co-founders borrowed from family and friends to capitalize an employee ownership structure, and at the end of five years, “the debt was paid and we owned the company.”

How do we integrate these new systems into the larger extractive ones, an audience member asked Millman, referencing the pressure upon Ben & Jerry’s to sell out. Millman replied that companies never need to sell out, but to resist this pressure requires “building some kind of consciousness into your business in order to maintain your intended mission or focus.” Maintaining a smaller scope and operating with an employee-owned structure are two possible strategies for a business to remain anchored in its community, he said.

Rich Carpenter, board member of ACORN Renewable Energy Co-op, spoke next on the subject of alternative financing and ownership of energy generation. ACORN, a member-owned business serving Vermont’s Addison County and other nearby towns, was founded in 2008 to help transition area communities from their near total dependence on fossil fuels to a greater reliance on affordable renewable energy. ACORN arose from its founders’ frustration with how little action was being taken to develop renewable energy in Addison County. Its programs include biomass heat, solar hot water, solar PV, as well as other heating, energy, and efficiency products and services. Three years ago, it erected its first 600-panel community solar array spread out on an acre of land, in collaboration with neighboring institutions. The array allows those who cannot install solar on their rooftops to buy an ownership stake in solar power.

Until recently, securities regulations made it difficult for ACORN to scale up its offerings, but recent legislation such as the federal JOBS Act and the Vermont Small Business Offering Exemption (see accompanying article) are now making it easier for Vermont companies to raise funds. This will help move ACORN closer to its goal of having “solar arrays owned and operated by local residents and benefiting local residents.”

Our next speaker, Kathy Ruhf, outgoing executive director at Land For Good, has been working on farmland access issues for almost thirty years. She began by sharing a quote that inspires her from the horticulturalist Liberty Hyde Bailey: “Equitable partition of land is the necessary basis of all self-sustaining agriculture.”

Farmland access and tenure are complicated issues, Ruhf said, because in addition to being a means of production, farmland is an asset, a place that can hold deep value, and a place to call home for farmers and their families.

Beginning farmers identify access to land and capital as their biggest challenges, and studies have shown they are more likely to succeed if they don’t carry land debt. Still, land can be difficult to come by. Its supply is diminishing, and it has to be accessible, appropriate, and affordable, not to mention findable, Ruhf said. It’s important to think about farmland “usership” as well as ownership, she emphasized, saying that there are many ownership/usership models that can work.

Finally, Ruhf noted that the aging of the farming population presents a big opportunity. Retirement and succession planning open up new doors to creative ownership possibilities.